Picture the first game of the 2010 football season:

As hordes of excited fans make their way to their seats in the Big House, an IRS agent waits by the VIP elevator that whisks elite ticket holders to their exclusive club seats. As they enter the lift, the agent gives each one a crisp $100 bill. Smiling, he says, “The U.S. government appreciates your support of Michigan athletics.”

A donor acknowledges the agent, adding, “Thanks, it really is a financial burden to show off my superior social standing and watch big-time college-football in world-class comfort.”

Sound far-fetched? Well, thanks to the marvels of federal tax deductions, luxury seating options at Big Ten football stadiums alone will cost U.S. taxpayers $17 million this year. The only differences between this scenario and reality are that the well-heeled athletic boosters use direct deposit, and they get a much bigger break than $100.

Here’s how the scam works: In order to obtain any of the new luxury seating options, a fan has to pay the price of a season ticket, which is $400. On top of that he makes a mandatory “donation.” For one of the club indoor seats, that donation runs $4,000 a year. Essentially, the cost of season tickets are $4,400, but with one catch — since the $4,000 is technically a donation to a non-profit organization, he doesn’t have to pay income tax on 80 percent of his contribution. As a result, Uncle Sam kicks in $1,120 toward the cost of the extra-wide club seat specifically cushioned for our donor’s extra-special posterior.

Oh, and remember those 82 luxury boxes at the Big House? Those mandatory donations range from $42,600 to $72,600. That means taxpayers will shell out between $12,000 and $20,000 per box year to the business or individual leasing each one.

If the club seats and boxes sell out, kickbacks — by which I mean “tax benefits” — from the IRS to Michigan’s premium seat holders will total roughly $3.5 million for 2010.

But wait — it gets worse.

Seven of the other Big Ten schools are due to bring in at least $1 million in subsidies from premium seating this year. The total cost to the U.S. government will top $17 million. That money would be enough to provide more than 3,000 additional needy students with the maximum Pell Grant of $5,300 a year. Instead, we use the cash to build exclusive palaces at athletic stadiums so that fat-cat donors don’t have to wait in line for the bathroom with the “regular” fans. Says a lot about our priorities, doesn’t it?

The Big Ten is just the tip of the iceberg. The other big football conferences — the Pac-10, the ACC, the Big 12, the SEC and the Big East — all have similar premium seating options for their donors. Darrel K Royal Stadium at the University of Texas, for example, has 113 luxury boxes in addition to five tiers of exclusive club seating for big donors.

And don’t forget that other sports, notably men’s basketball, baseball and hockey, have premium seating options of their own with similar payment plans. Many schools also make regular season ticket holders provide a mandatory “donation” along with their season tickets. At Michigan, all new football season-ticket holders fork over from $50 to $500 on top of the price of a ticket to get seats. Of course, 80 percent of that donation is tax deductible. All those deductions add up to an annual drain of several hundred million dollars on the U.S. Treasury.

There is one reasonable objection to my argument — the Michigan Athletic Department will pay out $15 million in scholarships to athletes this year, a significant chunk of its projected $85.6 million budget.

Fine — maybe we should carve out a tightly capped exemption for athletic scholarships not connected to premium seating. But since big-time college sports like football are essentially a for-profit enterprise, at least judging by the plush stadiums we build for our teams, let’s at least make the boosters pay for the fair market value of their club seats to support it.

Patrick O’Mahen can be reached at pomahen@umich.edu.

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